dashtrasher
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- Jan 24, 2002
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Washington Post Staff Writer
Thursday, December 11, 2003; Page E04
A lawyer for Mesa Air Group Inc. told a federal judge yesterday that the carrier faced serious obstacles that could thwart its effort to acquire Dulles-based Atlantic Coast Airlines Holdings Inc.
"We cannot be certain that a merger will be completed or not," Mesa attorney Gregory A. Markel told U.S. District Judge Rosemary M. Collyer during the final day of a two-day hearing on Atlantic Coast's request for a temporary injunction to block the takeover. Collyer is expected to issue her ruling within a week.
Mesa launched its hostile bid for Atlantic Coast in October. Atlantic Coast had announced in July that it planned to sever its 14-year United Airlines partnership as a regional operator of United Express flights and transform itself into a low-fare carrier.
In court, Markel cited Atlantic Coast's injunction request as one key obstacle to Mesa's takeover. Atlantic Coast has gone to court to block Mesa's move, arguing that Mesa and United Airlines used anti-competitive tactics in a bid to stop Atlantic Coast from becoming a low-cost airline.
Markel also said another Atlantic Coast partner, Delta Air Lines Inc., could ultimately help quash the takeover bid. Under an existing contract between Atlantic Coast and Delta, Delta has the option of canceling its partnership if Atlantic Coast's ownership changes. A cancellation would saddle the new owner with upkeep costs of $20 million a year on 30 outdated Fairchild Dornier jets that Atlantic Coast uses on the Delta flights. That additional cost could make Mesa's unsolicited offer, now valued at $461 million, less attractive for Mesa shareholders. Mesa said it was in talks with Delta about the contract.
The uncertainties made it unclear "if Mesa will be successful" in its takeover attempt, Markel said.
On Tuesday, the Securities and Exchange Commission said that Mesa could begin soliciting votes from Atlantic Coast shareholders on its proposal that Atlantic Coast's board be voted out and replaced by a slate picked by Mesa. But Mesa executives were waiting for a ruling from Collyer before they begin soliciting Atlantic Coast shareholders.
Thursday, December 11, 2003; Page E04
A lawyer for Mesa Air Group Inc. told a federal judge yesterday that the carrier faced serious obstacles that could thwart its effort to acquire Dulles-based Atlantic Coast Airlines Holdings Inc.
"We cannot be certain that a merger will be completed or not," Mesa attorney Gregory A. Markel told U.S. District Judge Rosemary M. Collyer during the final day of a two-day hearing on Atlantic Coast's request for a temporary injunction to block the takeover. Collyer is expected to issue her ruling within a week.
Mesa launched its hostile bid for Atlantic Coast in October. Atlantic Coast had announced in July that it planned to sever its 14-year United Airlines partnership as a regional operator of United Express flights and transform itself into a low-fare carrier.
In court, Markel cited Atlantic Coast's injunction request as one key obstacle to Mesa's takeover. Atlantic Coast has gone to court to block Mesa's move, arguing that Mesa and United Airlines used anti-competitive tactics in a bid to stop Atlantic Coast from becoming a low-cost airline.
Markel also said another Atlantic Coast partner, Delta Air Lines Inc., could ultimately help quash the takeover bid. Under an existing contract between Atlantic Coast and Delta, Delta has the option of canceling its partnership if Atlantic Coast's ownership changes. A cancellation would saddle the new owner with upkeep costs of $20 million a year on 30 outdated Fairchild Dornier jets that Atlantic Coast uses on the Delta flights. That additional cost could make Mesa's unsolicited offer, now valued at $461 million, less attractive for Mesa shareholders. Mesa said it was in talks with Delta about the contract.
The uncertainties made it unclear "if Mesa will be successful" in its takeover attempt, Markel said.
On Tuesday, the Securities and Exchange Commission said that Mesa could begin soliciting votes from Atlantic Coast shareholders on its proposal that Atlantic Coast's board be voted out and replaced by a slate picked by Mesa. But Mesa executives were waiting for a ruling from Collyer before they begin soliciting Atlantic Coast shareholders.
Loved it. It's up there with the Diesel 8
